Alphyn Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -21.7% for the quarter, underperforming its benchmark, the S&P 500 Index which returned -19.6% in the same quarter. You should check out Alphyn Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Alphyn Capital spoke about Alphabet Inc. (NASDAQ:GOOG) and Amazon.Com Inc (NASDAQ:AMZN) stocks. Alphabet and Amazon are technology companies. Year-to-date, GOOG stock gained 5.0% and on May 11th it had a closing price of $1403.26. GOOG’s market cap is of $958 billion. Meanwhile, year-to-date, AMZN stock gained 30.5% and on May 11th it had a closing price of $2409.00. AMZN’s market cap is of $1.2 trillion. Here is what Alphyn Capital said:
“We added Alphabet and Amazon to the portfolio. These are of course well known and understood companies and, together with existing holdings Tencent/Naspers/Prosus, have some of the strongest economic moats in existence in business today. It is difficult to imagine a world (at least in the next several years) in which these companies with their massive cash balances (~$32bn Alphabet, ~$115bn Amazon) face real existential risk. If anything, the current crisis has only accelerated the cloud/online and e-commerce trends. Well known as these companies are, I do not believe the market (certainly not today) accounts for their future earnings power, in particular Amazon which is coming of a multi-year capex investment cycle with significant avenues for future growth.”
In Q4 2019, the number of bullish hedge fund positions on AMZN stock increased by about 12% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Amazon’s upside potential.
Disclosure: None. This article is originally published at Insider Monkey.